Form 990 Schedule A Instructions (Page 15 of 19) in pdf

regulations. See Regulations section

An amount set aside and taken into

Net losses from a related business or

53.4942(a)-2(d)(1).

account as a distribution counting

other charitable activity that produces

toward the distribution requirement in a

gross income (no deduction in excess of

Line 1. Report the organization’s net

prior tax year to the extent it is

the income from such activity).

short-term capital gain, if any.

determined that such amount isn't

Charitable contributions under

Long-term capital gains and losses from

necessary for the purposes for which it

sections 170 or 642.

the sale or disposition of property aren't

was set aside.

Net operating loss carrybacks and

taken into account in determining

carryovers under section 172.

adjusted net income (unless reportable

Line 3. Report all other gross income.

Dividends under section 241 and the

on line 2 as recoveries of prior-year

Gross income includes all amounts

sections following it (the

distributions). Net short-term capital

derived from, or in connection with,

dividends-received deductions for

loss can't be carried back or forward to

property held by the organization

corporations).

other tax years. Amounts treated as

(except as specified otherwise in the

Net capital losses (short-term or

long-term capital gains include capital

instructions for Line 1). Include income

long-term).

gain dividends from a regulated

from any related or unrelated trade or

Expenses and interest relating to

investment company and net section

business. Include income from

tax-exempt income under section 265

1231 gains (but net section 1231 losses

tax-exempt bonds. Don't include the

are deductible.

are treated as ordinary losses and thus

following.

Section B. Minimum Asset

taken into account). If the fair market

Gifts, grants, or contributions

value of property distributed for

received.

Amount

charitable purposes exceeds adjusted

Long-term capital gains or losses or

The rules for determining the supporting

basis, the excess isn't deemed

net short-term capital losses.

organization’s minimum asset amount

includible in income.

Income received from an estate,

are set forth in Regulations sections

unless the estate is considered

Adjusted basis. The adjusted basis for

1.509(a)-4(i)(5)(ii)(C) and

terminated due to a prolonged period of

purposes of determining gain from the

1.509(a)-4(i)(8), using valuation

administration.

sale or other disposition of property is

methods described in Regulations

Distributions from a trust created and

the greater of:

section 53.4942(a)-2(c).

funded by another person.

1. The fair market value of such

Certain amounts received by an

Prior and current year columns. The

property on August 17, 2006, plus or

organization in the redemption of stock

organization’s minimum asset amount

minus all adjustments thereafter and

in a corporate disqualified person in

for the prior tax year is used in

before the date of disposition under

order to avoid excess business

determining the organization’s

sections 1011–1023, if the property was

holdings, which are treated as not

distributable amount for the current tax

held continuously from August 17, 2006,

essentially equivalent to a dividend

year. The form also allows for reporting

to the date of disposition.

under section 302(b)(1) (and thus as

the organization’s minimum asset

2. The adjusted basis under

amounts received in exchange for the

amount for the current tax year for use

sections 1011–1023, without regard to

stock, giving rise to long-term capital

in next year’s calculations; this reporting

section 362(c). If assets acquired before

gain or loss) if the conditions of

is optional but may be helpful if the

August 17, 2006, were subject to

Regulations section

organization anticipates being required

53.4942(a)-2(d)(2)(iv) are met.

depreciation or depletion, to determine

to complete Part V next year.

the adjustments to basis between the

Line 5. The deduction for depreciation

Definition. In figuring the minimum

date of acquisition and August 17, 2006,

under section 167 is allowed, but only

asset amount, include only assets of the

straight line depreciation or cost

on the basis of the straight-line method.

supporting organization that aren't used

depletion must be taken into account.

The deduction for depletion under

or held for use by the supporting

Any other adjustments that would have

section 611 is allowed, but without

organization (or by a supported

been made during such period (such as

regard to section 613 (percentage

organization, if the supporting

a change in useful life based upon

depletion).

organization provides the asset free of

additional data or a change in facts)

charge or at nominal rent) to carry out

Lines 6 and 7. No deduction is allowed

must also be taken into account.

the exempt purposes of the supported

except ordinary and necessary

organization(s). Assets held for the

The adjusted basis for purposes of

expenses paid or incurred for the

production of income or for investment

determining loss is only the amount

production or collection of gross

aren't considered to be used directly for

described in item 2 above.

income, or for the management,

charitable functions even though the

conservation, or maintenance of

Line 2. Recoveries of prior-year

income from the assets is used for

property held for the production of

distributions include the following.

charitable functions. It is a factual

income. Such expenses may include

Repayments received of amounts

question whether an asset is held for the

operating expenses such as

which were taken into account as a

production of income or for investment

compensation of officers and

distribution counting toward the

rather than used or held for use directly

employees, interest, rent, and taxes.

distribution requirement in a prior tax

by the supporting organization or a

Where only a portion of property

year.

supported organization for charitable

produces income (or is held for the

Proceeds from the sale or disposition

purposes. For example, an office

production of income) and the

of property to the extent that acquisition

building used to provide offices for

remainder is used for charitable

of such property was taken into account

employees engaged in managing

purposes, the expenses must be

as a distribution counting toward the

endowment funds for the supporting

apportioned between exempt and

distribution requirement in a prior tax

organization or supported organization

non-exempt use on a reasonable basis.

year.

Don't deduct the following.

Instructions for Schedule A (Form 990 or 990-EZ)

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Form 990 Schedule A Instructions Page 15

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